A troubled non-profit contracted with the city Dept. of Homeless Services hasn’t learned its lesson on financial malfeasance, according to an audit.
A follow-up to a 2011 report filed by the city Comptroller’s office found the nonprofit Aguila Inc. overbilled DHS by $10 million while also exposing the homeless to deplorable building conditions.
The original report imposed 19 recommendations to Aguila, though it only completed one, ignored eight and half-heartedly complied with ten recommendations, according to the audit.
Eighteen new recommendations have now been issued to DHS in the new audit, which include surprise building inspections, an aggressive push to recoup the millions of dollars lost and entering into written contracts with Aguila operators.
DHS reps were allowed to rebut, forwarding a detailed letter disagreeing with all of Comptroller John Liu’s findings and recommendations.
Of concern to the Comptroller’s Office was the lack of written agreements with DHS, leaving no paper trail between the nonprofit and agency.
Other findings included Aguila facilities being filthy, violating housing regulations while skirting over $600,000 in utility bills. Since 2011, Aguila has paid back the city $558,000 of the $10 million owed.
“Aguila’s appalling record has not improved and DHS continues to turn a blind eye,” said Liu. “DHS should just dump Aguila as a shelter operator, and City Hall should direct its resources fixing DHS rather than litigating against my office.”
A city lawsuit against the Comptroller’s office seeks to reverse its rejection of two DHS contracts with Aguila. Liu has argued the contracts are riddled with mistakes while violating the city’s fair-share analysis.
Aguila Inc. continues to do business with the city, particularly in the Bronx, the borough with the most homeless shelters. DHS paid Aguilla roughly $57 million in service fees Fiscal Year 2013, up from $46 million a year before.
The nonprofit is operated by Richard Hess, a former DHS commissioner during the early years of the Bloomberg administration. Under a federal mandate, the administration was forced to find housing for the homeless, seeking out Aguila Inc. as a contractor.
Aguila leased several Bronx buildings, turning them into cluster-site shelters, that mixing homeless with rent-paying tenants.
In one Aguila cluster-site shelter in Longwood, Aguila has received an $18 million contract to house 40 homeless families for six years, and pays the landord $35,000 per family, considered “way above market value.”
DHS deferred comment to the mayor’s office, where spokeswoman Samantha Levine said the lawsuit prevented comment.
“We are suing him,” she said, “but we would caution anyone against placing confidence in this Comptroller when it comes to questions of numbers.”